We used to live in a simpler time, where life’s little milestones (marriage, buying a house, having kids etc.) was a commonality amongst the majority of the population. In the last 20 years or so, we have seen the rise of a generation of ambitious, liberal, individuals colloquially now known as the millennials. Combining this with the severity of housing, food and healthcare inflation, especially in contrast to income inflation, just highlights the importance of ensuring you have adequate savings for you and your kids.
‘Practice what you preach’, a fairly common idiom, but it’s a remarkably effective one as leading by example can be the best way to show your children the power of saving. The following are basic strategies that can be easily integrated into any lifestyle.
Bottled water; the plastic is bad for the environment, it’s unnecessary, and it’s expensive. A regular sized 600ml bottle will set you back around $1. If you drink 2 of these a day that is almost $750 a year! Solutions? There are many, the simplest of which is regular tap water. If this is not an option due to sanitary concerns, consider installing a filter or a water treatment system in your home. Otherwise, your workplace, your gym, or your local park could all have filtered water, and are great places to fill up throughout the day.
Most people get a haircut at least once a month, however being such a personalised service prices can range from as little as $5 to well over $100. The difference between a $10, and a $40 haircut can add up to a few hundred dollars every year. Finding a hair salon or barber that offers greater value can contribute significantly to your savings.
Smoking is a touchy subject, and I am not here to tell you why you should cut down or even quit. Everyone already knows how bad it is for you, how addictive it is, but more importantly in relation to savings, how undeniably expensive it is. A pack in Singapore is around $13 SGD. This could add up to thousands depending on how much you smoke. Just something to think about.
Valuing one’s social worth or status, by contrasting your accumulation of material goods with those of a neighbour can be a terrible habit to make. For some people, failing to keep up can be seen as socio-economic or cultural inferiority. This logic is flawed, it is imperative to disregard what your neighbours are doing, and focus on your own financial situation. You see a bigger house, a nice car, or a flashy watch is not an indication of wealth but simply an indication of where someone has chosen to spend their money. Living outside your financial means is not wise.
Leading by example, although effective, should only be one branch on your tree of strategies. Getting the right message across to your kids will usually be a multi-pronged approach. So here are a few ways you can get your children to think about saving, and make wiser decisions.
The humble piggy bank may seem too idealistic, but it is a useful tool. Start by getting your kids to put their loose change in there and over time replace it with notes so they can see that a little bit of saving adds up significantly over time. They will be able to see that there is something tangible at work.
Setting goals / competition
Setting goals, or running a competition with siblings or other kids can help motivate and excite them to save. A healthy rivalry can be paramount to creating a more fun game-like atmosphere.
This tactic needs to be employed with consideration as it may not always be feasible, but a parent matching savings (as in 1 for 1) with a child, can be a great motivator, especially if they are saving for something important.
Having stressed the importance of savings so much throughout this article, it is important to highlight the need for moderation and parental judgement. Having a healthy savings attitude is a key to success, but stretching it to an extreme could result in an individual who is overly frugal and even borderline stingy. Therefore just like most things in life, solid judgement and moderation will see your child saving in a positive sustainable way.
The art of saving needs to be embraced by the mother/father figure in a child’s life for the child to really grasp the importance of saving. As a parent, your child will always look up to you, which highlights how leading by example could result in both you and your children living a more sustainable, healthy lifestyle. The benefits of saving appropriately make learning and teaching your child to save a very rewarding experience. Good luck and I hope you put your newly acquired skills to good use.